The scars of the Great Recession
The graph above shows the unemployment rate (right axis) and the average duration of unemployment (in weeks, left axis). It’s well known that the unemployment rate is currently very low. However, the duration of unemployment since the Great Recession has never been longer.* What’s going on?
The graph below has an answer. The share of long-term unemployment is significantly higher than in any other post-WWII period. Indeed, those unemployed for more than 6 months (in green) still represent over 20% of the unemployed, after a peak of over 45% in 2011. This share increases after recessions, but the most recent recession was deeper and much longer than the others. It’s also well-known that the long-term unemployed have a much harder time finding a job, leading to a catch-22 situation for them. And thus their numbers still persist at a high level.
How these graphs were created: Search for unemployment duration and click on the series name. From the “Edit Graph” panel, open the “Add Line” tab and search for “unemployment rate.” Open the “Format” tab and place the axis for the second line on the right. For the second graph, look at the notes for the duration series, where there is a link to the release table. From there, check the relevant series, click on and “Add to Graph.” From the “Edit Graph” panel, open the “Format” tab, change graph type to “Area, Stacked,” and finally move the “less than 5 weeks” series up so that they are all properly ordered.
*At least in the postwar era.
Suggested by Christian Zimmermann.
Mapping education and unemployment across the U.S.
Much research has been published on the labor market transition from low-skill and routine jobs to high-skill and non-routine jobs at both a national and a local level. But is this job polarization occurring to the same degree across the country? A recent report co-sponsored by the St. Louis Fed looks at the issue of workforce development in light of this changing economy, especially in southern regions of the U.S. that typically rely more on a low-skilled and low-wage labor force. These GeoFRED maps show that the southern states typically have lower levels of educational attainment for both high school (map above) and bachelor’s degrees (map below).
With a currently tight labor market, there’s demand for skilled workers, since these positions are also seeing the most growth. But for some regional economies, especially in southern states, there seems to also be an unmet demand for middle-skill jobs that require more than a high school education but not a four-year college degree.
The FRED graph below shows that the unemployment rate is lower for those with some college and/or an associate’s degree than (i) for those with only a high school diploma and (ii) the overall national unemployment rate.
The southern states trail the rest of the nation in median wages and there are more persistently poor counties in the south. There seems to be an opportunity, then, for investing in that workforce to create a better-skilled labor pool to help grow the regional economy.
How these maps were created: From GeoFRED, click on “Build New Map.” Under the “Tools” menu, select “County” as the region type. For the first map, enter “high school graduate” and select “High School Graduate or Higher (5-year estimate).” For the second map, enter “bachelor’s degree” and select “Bachelor’s Degree or Higher (5-year estimate).” For the third map, enter “associate’s degree” and select “People 25 Years and Over Who Have Completed an Associate’s Degree or Higher (5-year estimate).” For the FRED graph, search for “civilian unemployment rate.” In the “Edit Graph” panel, add two lines by searching for “unemployment rate associate degree” (series ID LNS14027689) and “unemployment rate high school” (series ID LNS14027660).
Suggested by Shuowei Qin and Christian Zimmermann.
View on FRED, series used in this post:
Comparing the strongest economic recoveries in recent U.S. history
In a previous post, we discussed how the economic recoveries from recessions are longer and slower than the downturns that lead to those recessions. Today, we compare the sizes of recoveries across the economic history of the United States. In the graph above, which shows the unemployment rate, the current recovery is clearly remarkable: The drop from unemployment’s high point of 10% down to 3.9% (at the time of this writing) is 6.1 percentage points. The only recovery that comes close (in the time period shown here) is the 1983-89 recovery, with a 5.8-percentage-point decrease (10.8% to 5%). However, this sample is limited to only the ten recoveries since 1948.
To go back farther, we need to use different data. Thank goodness FRED has some historical data compiled by the NBER on the unemployment rate! The NBER methods for compiling the data shown below aren’t entirely comparable to the BLS methods for the data shown above. In fact, the NBER series is a composite of three different series. But as long as we acknowledge which data sets we’re looking at, we should be able to make some generally fair comparisons. Here, the recoveries from the Great Depression stand out: First, the unemployment rate topped at 25.6% and then dropped to 11%. A 14.6-percentage-point drop. The second recovery went from 20% to 0.2%. A 19.8-percentage-point drop!
So, although the most recent recovery seems remarkable after WWII, it’s small compared with the recoveries before WWII. Even if in some sense we’re comparing apples and oranges, the oranges are a lot bigger.
How these graphs were created: Search for “unemployment rate” and choose each series individually: civilian unemployment rate (monthly, seasonally adjusted, starting in January 1948) and unemployment rate for United States (monthly, seasonally adjusted, starting in April 1929).
Suggested by George Fortier and Christian Zimmermann.
View on FRED, series used in this post: